Habton Farms (an unlimited company) v Nimmo and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Clarke,Lord Justice Jonathan Parker,Lord Justice Auld |
| Judgment Date | 06 February 2003 |
| Neutral Citation | [2003] EWCA Civ 68 |
| Docket Number | Case No: A3/2002/0270 |
| Court | Court of Appeal (Civil Division) |
| Date | 06 February 2003 |
[2003] EWCA Civ 68
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LEEDS MERCANTILE COURT
His Honour Judge Behrens
Lord Justice Auld
Lord Justice Clarke And
Lord Justice Jonathan Parker
Case No: A3/2002/0270
Timothy Hartley (instructed by Pearsons & Ward) for the Respondent
Stephen Howd (instructed by Lodders) for the Appellant
The Horse
This action arises out of a purported contract made on 12 October 1998 for the sale of a thoroughbred racehorse called High Spirits for £70,000. The seller was the claimant and the buyer was said to be either the first or the second defendant. In the event the claimant never received the £70,000 and unfortunately, on 2 December 1998, High Spirits had to be put down while still in the claimant's possession. The action was brought principally in order to recover the £70,000 from the first or second defendants.
The Claim
The claimant initially alleged that it had contracted to sell the horse to the first defendant, either as principal or as agent for an undisclosed principal. It later amended the claim to assert in the alternative that the contract was made with the second defendant through his agent the first defendant. The claimant thus claimed the price of £70,000 against the first or second defendant. In the further alternative it claimed damages for breach of warranty of authority against the first defendant if it should be held that the first defendant purported to contract on behalf of the second defendant without the second defendant's authority. The amount of damages claimed was £70,000.
The Judgment
On 25 June 2002 His Honour Judge Behrens, sitting in the Leeds Mercantile Court, gave judgment against the first defendant for £70,000. The first defendant now appeals against that judgment pursuant to permission granted by the judge. The judge's conclusions may be summarised as follows:
i) The first defendant did not enter or purport to enter into any contract with the claimant as a principal.
ii) On 12 October 1998 the first defendant purported to contract with the claimant as the agent of a named or an unnamed principal. He thus warranted his principal's authority to do so.
iii) The judge did not decide whether the principal was named or unnamed, but in either event his 'principal' was the second defendant, but the second defendant was not bound by the contract because:
a) the first defendant had no express or implied authority to contract on his behalf;
b) although in some respects the first defendant may have acted as a bloodstock agent for the second defendant, a bloodstock agent does not (without more) have usual authority to buy horses on behalf of his principal;
c) the second defendant did not hold the first defendant out as having such authority so as to clothe him with ostensible authority to buy the horse.
iv) The claimant relied upon the first defendant's warranty of his principal's authority by making the contract.
v) The claimant was in principle entitled to damages for breach of warranty of authority.
vi) The measure of damages was £70,000.
The Facts
Before considering the grounds of appeal and the submissions made by Mr Howd on the first defendant's behalf, it is convenient to consider the facts. So far as relevant the judge's findings may be summarised in this way. The claimant is a company limited by guarantee. Its shareholders and directors are Mr Peter Easterby, Mr Peter Easterby's wife and his son Mr Tim Easterby. Mr Peter Easterby and his son are well-known racehorse trainers training from Habton Grange in Malton. In early 1998 Mr Peter Easterby's trainers' licence was transferred to Mr Tim Easterby and Mr Peter Easterby became his son's assistant. As well as training racehorses they were involved in the purchase and sale of horses. At the relevant time in October 1998 it was Mr Peter Easterby who negotiated the sales.
The second defendant, Mr Williamson, is a wealthy American who at the time of the trial owned about thirty racehorses. He sometimes buys horses in the United Kingdom. When looking for horses he is assisted by his trainer in Southern California, Ms Gaines. He is also assisted by others including from time to time a bloodstock agent or scout called Mr MacDonald and the first defendant, Mr Christopher Nimmo. The judge held that neither Ms Gaines nor Mr MacDonald or indeed anyone else including the first defendant had the second defendant's authority to buy or to contract to buy horses on his behalf. He accepted the evidence of both the second defendant and Ms Gaines to that effect. They both gave evidence by video link. The judge was impressed by their evidence and formed the view that they were both honest and reliable witnesses. Mr MacDonald did not give evidence and, as I understand it, none of his various accounts of what happened was put in evidence. It is plain that the judge regarded him as a potentially unreliable source of information.
The first defendant accepted in evidence that he knew that every purchase had to have the express authorisation of the second defendant and that neither Mr MacDonald nor Ms Gaines had any authority to buy horses on his behalf without such authority.
The first defendant visited Habton Grange to look at High Spirits in June 1998. He also visited Habton Grange again in September 1998, this time with Mr MacDonald and Ms Gaines. The judge considered what was said on both those visits in some detail. Because of difficulties of recollection on the part of the witnesses the judge did not find it easy to reach firm conclusions as to what was said. However, as to the first visit, the judge said that he was not satisfied that the first defendant made it clear that he was acting on behalf of the second defendant and, as to the second visit, the judge said this in paragraph 37 of his judgment:
"37. I have to confess as being very uncertain as to what happened at this meeting. It seems to me likely that both Mr Peter Easterby and Mr Tim Easterby were present at some time. I think that it is probable that Mr Williamson's name was mentioned at some time in the meeting in that I think it likely that Mr MacDonald and Ms Gaines were introduced as his agent even though neither Mr Peter Easterby nor Mr Tim Easterby now remembers it. I am not however satisfied that it was made clear that all future negotiations for the horse were to be carried out as agent for Mr Williamson. It has to be remembered that there were no negotiations for the purchase of High Spirits at that time. No offers were made or rejected. The principal purpose of the visit was to allow Ms Gaines to view High Spirits to assess him. As she said in evidence – she liked him."
The judge held that the negotiations for the purchase of High Spirits took place on the telephone between the September meeting and 12 October 199He concluded that the final negotiations were conducted by Mr Peter Easterby. The judge then expressed his conclusions thus in paragraphs 40 to 42:
"40. In any event neither Mr Peter Easterby nor Mr Nimmo could remember any details of the telephone conversations now. Both of them were satisfied that as a result of the negotiations High Spirits had been sold for £70,000 subject only to a vet's inspection and approval of x-rays in America.
41. In evidence Mr Nimmo accepted that there was a concluded deal. Nothing was said at that time about it being subject to payment by the ultimate buyer. He said he received authority from Mr MacDonald to proceed.
42. Following the final telephone conversation Mr Nimmo sent a fax dated 12 th October 1998 to Mr Peter Easterby and Mr Tim Easterby which reads:
"Further to our conversation of this morning I confirm a net purchase price for the above horse of £70,000, subject to veterinary inspection and approval of x-rays in the USA.
I will arrange for Aldridge & Pritchard to vet the horse ASAP."
I interpose to note that that fax was sent on fax paper headed simply 'CN Nimmo'.
In paragraph 43 the judge considered the meaning of 'net' in the fax and added in paragraphs 44 to 46:
"44. On the same day Mr Nimmo faxed Mr MacDonald asking for details where the bill for the vet should be sent and where the x-rays should be sent.
45. On 13 th October 1998 High Spirits was inspected by Mr Ordidge. X-rays were taken and sent to Dr Maher in America. It is common ground that the vet's inspection was satisfactory and that the x-rays had been passed by Dr Maher.
46. According to Mr Nimmo Mr MacDonald faxed him to inform him of Dr Maher's approval and to request wiring instructions for the purchase price. At about 9.38 am on 19 th October 1998 Habton Farms sent details of their bank account to Mr Nimmo."
It is thus plain, as I see it, that the judge held that the first defendant told the claimant that the horse had passed the vet and that the x-rays were OK and asked the claimant to send wiring instructions with regard to payment of the purchase price.
Mr MacDonald subsequently prepared a document for the second defendant in which he stated that the asking price for High Spirits was £80,000. The judge described the attitude of the second defendant in this way in paragraph 49:
"49. After Ms Gaines had received the reports from the vets and Dr Maher she presented the information to Mr Williamson. It may be that Mr MacDonald was there as well. In any event Mr Williamson decided that the horse was too old and (to use the phrase in his witness statement) had "too much mileage". He did not wish to...
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